The Indian start up eco system has been steadily growing over the last few years. India is now competing with Israel to be the 3rd largest start-up base, while U.S. and UK retain the top two spots. The period from 2014 to early 2016 saw a huge jump in the number of start ups founded and a sudden rise in investments. But now there is slight ebb in the numbers with fewer start ups finding investments and 2017 saw an addition of 1000 plus new start ups which is 29% lower than the previous year. This lull in funding has set in because investors are looking at bigger picture with future potential. Some major points are:
- Investors take long time to decide on which idea is to be funded
- Experienced founders at least in their 30s are preferred
- A thorough background check of the founders is done and those with history of failed start ups is better
- Focus is more on B2B ideas
- A clear map showing future profits
However, this ebb has resulted in a steadier growth of competitive business ideas which explores unknown territories, untapped opportunities and is more innovative. Though both funding value and number of deals dropped in 2017, funding per start-up grew by 7%. This clearly indicates that investments are still coming in but for businesses with more innovative ideas that promises growth.
Sectors like Edu Tech, Health Tech, Fin Tech remains in the top bracket however since 2016 there has been a decline in the Food Tech start ups. There is now a growth of advanced technology start ups that includes:
- Artificial Intelligence,
- Internet of Things,
- 3D Printing,
- Block Chain Technology,
- Analytics etc.
Also there is a rise of B2B share in the newly incorporated start ups although B2C continues to be the dominant model. This means that earlier start ups were mainly catering directly to customers (B2C) and that model leads to a lot of cash burn out. So the shift is now seen towards start up businesses catering to other business houses (B2B). As per a recent report start ups addressing social concerns are rising since 2016. This indicates an increased lean towards social entrepreneurship. This is indeed a positive sign for a country like India where there are many socials issues in different areas like health care, education, waste management, energy, sanitation, water, etc. Innovative start ups/social enterprises in such areas can make a social impact for the betterment of the society at large.